Key Takeaways

The U.S. economy contracted in the first quarter , raising the question: Are we in a recession?

Economic growth, as measured by the Gross Domestic Product , has to be negative for more than one quarter for a recession, according to the National Bureau of Economic Research , the nonprofit research group that officially calls recessions. According to the NBER: "A recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months."

The NBER has not yet declared a recession. The current downturn also hasn't met an unofficial definition of recession, which is two consecutive quarters of negative growth. However, economists' comments on Wednesday's GDP figures were full of speculation about a possible recession ahead.

Is a Recession Ahead?

Wednesday's report was a stark contrast to the beginning of the year, when the economy grew steadily with no end to the expansion in sight. Since then, President Donald Trump's tariffs have shaken up financial markets , squashed consumer confidence , and raised the possibility of a serious economic downturn ahead .

While the NBER hasn't declared a recession, it doesn't necessarily mean we aren't at the beginning of one. The bureau only calls recessions months after the fact, when backward-looking data indicates one has begun.

Some economists see a recession in the tea leaves because Trump's tariffs have disrupted business. Because the rollout of the trade policy has been so unpredictable, many businesses have become reluctant to invest and hire new employees.

“The numbers increasingly suggest a recession may have begun,"  David Russell, global head of market strategy at TradeStation, wrote in a commentary.

On the other hand, some essential parts of the economy have stayed resilient, including the main engine of the economy, consumer spending, which surged in March .

"The consumer is too strong to speculate the economy has dipped into recession," Jeffrey Roach, chief economist for LPL Financial, wrote in a commentary.

Still, experts believe recession risks have grown even if it's not a certainty. In recent months, forecasters have raised the chances of the U.S. entering a recession in the coming year. Friday's highly anticipated report on the job market could shed light on how resilient the economy is to the tariff shock.

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